Goods & Services Tax (GST) B.C.Bhat

Why Change ??? Due to Liberalization & Globalization Other countries have already implemented Strict Competition in the domestic as well as international market Eliminate cascading – VAT/CST on ED No Credit for CST, Entry Tax, Octroi Avoid Double Taxation – VAT & Service Tax on IT Services, Works Contract, Restaurant, Hotel Room Rent Customers satisfaction Uniformity of tax structure throughout the country Eliminate Forms and seamless movement of goods Widening the tax base, System driven, Voluntary compliance

Present Rate of Taxes Customs Duty :- BCD–7.5%, CVD–12.5%, SAD–4% (plus Cess) Central Excise Duty :- 2%, 6%, 12.5% Service tax :- 15% VAT : 0%, 2%, 5.5%, 14.5% CST : 0%, 2%, 5.5%, 14.5% Entry Tax, Octroi : 2% - 6% Entertainment tax, Luxury Tax : 5-12%

Customer Perception of GST Customs Duty Central Excise Duty Service tax VAT CST Entry Tax Octroi Entertainment tax Luxury Tax GST

GST Act Central Excise Duty Service tax VAT Entertainment tax Luxury Tax ED + CST (Interstate & Imported) Entry Tax / Octroi C-GST S-GST I-GST Abolished

CENVAT / VAT - Manufacturer 1. ED paid on RM/Comp/ Consumables (Input) ED payable 2. ED paid on Capital goods on finished 3. Service tax paid on goods Input services 1. VAT paid on RM/Comp/ VAT / CST Consumables payable on 2. VAT paid on Capital goods finished goods Note : No credit for CST paid on Interstate purchases, Entry Tax, Octroi

VAT - Trader VAT paid on VAT / CST Purchases payable on Sales Note : No credit for CST paid on interstate purchases No Credit for Entry Tax, Octroi No credit for Profession Tax, Luxury Tax, Entertainment Tax, Road Tax

Applicable GST CGST – 9% Supplier - Sells within the State (Manufacture, Trader, Service) SGST – 9% Supplier - Sells Outside the State IGST – 18% No C-Form. Full tax has to pay. Entire Credit either the manufacturer or trader will get No Entry Tax, Octroi Cost of Production will come down

Value of Taxable Supply Sec.7. Supply includes—All forms of supply of goods or services for a consideration in the course of business Sec.15 :- Value shall be “Transaction value” includes :- (a) Inclusive of all excluding Taxes (GST) (b) Any amount incurred before supply of goods (c) Incidental expenses, Packing, Forwarding, Freight (d) Does not include Discount given before or at the time of supply 2. Threshold exemption Rs. 20.00L turnover in a year for small manufacturers, traders & Service providers (URD) –GST-NIL 3. Buyer has to pay GST under Reverse charge 4. Optional compounding scheme up to Rs.75.00L for taxpayers (Manufacturer – 2%, Trader – 1%) 5. GST has to pay even for Advance received (Supervision Charges)

Tax Invoice 1. Tax Invoice – For Supply of goods (Division wise for Supervision charges) 2. Bill of Supply – For Exempted goods, For Tax payment under Reverse charge, Tax payment for purchase from un-registered dealer (URD) 3. Receipt Voucher – For Advance Received 4. Supplementary Invoice – For revision in rates 5. Credit Note & Debit Note 6. Delivery Challan – Movement of goods for Not for sale, Free Supply, Job work 7. Supply outside the state Regular Invoice with IGST 8. E-Waybill – For supply of goods more than Rs.50,000/-

Returns 1. GSTR1 – Outward Supply (Sales & Service) – Before 10th 2. GSTR2 – Inward Supply (Purchases) – Before 15th 3. GSTR3 – Monthly Return – Before 20th 4. GSTR9 – Annual Return – Before 31st Dec 5. No Revised Return 6. Late Fee – Rs.100/- per day maximum Rs.5000/- 7. Credit & Cash Ledger – CGST, SGST, IGST 8. In the case of Reverse charge – Date of payment to the vendor 9. In case if the payment is not made then, GST has to pay within 60 days of date of Invoice 10. Last month Bill (Supervision Charges, Scrap Sales, Reverse charge) – If you pay GST in the next month – Interest has to pay for delayed payment 11. Monthly payment of Tax and monthly filing of Return 12. Single Return for all the Goods & Services from all the Divisions

Details Required for filing the Return Sales :- Scrap Sales & Supervision Charges :- 1. Statement showing Sales Details – Invoice No., Date, Party’s Name, Address, HSN Code, GSTIN No., Value, % of Tax, CGST, SGST, IGST 2. Separate statement for Local Sales & Interstate Sales Purchase :- 3. Purchase Details 4. URD Purchase (Even small purchases will attract GST) 5. Service Details – GST paid under reverse charge 6. Purchase Return 6. TDS Deduction and TDS Details

Demand & Recovery 1. Recovery of Short payment or non payment SCN – within 3 years from date of Annual Return 2. Recovery of Short payment due to fraud or suppression of facts SCN – within 5 years from the Annual Return 3. Appeals to First Appellate Authority – Commissioner Appeals 4. Appeals to the Appellate Tribunal 5. Audit, Inspection, Preventive, Vigilance – Continues 6. Penal Action for defaulters 7. Rating will be done for prompt tax payers 8. No C-Form, Road Permit, e-Sugam

Rate of Tax – Sales & Service Details HSN CODE Description GST Service NA Distribution of Electricity NIL 00440249 Supervision Charges 18% Sales 72044900 Iron & Steel Scrap 70010010 Glass Scrap 44012200 Wood Scrap 5% 27101950 Waste Oil 27101980 Lubricant Oil 27101960 Transformer Oil 94031010 Steel Furniture 28% 94036000 Wooden Furniture 94037000 Plastic Furniture 85042100 Transformer 90283010 Electricity Meters 85441110 Electric Wires & Cables

Rate of Tax – Sales & Service Details HSN CODE Description GST Reverse Charge Service Received from State or Central Govt. Dept 18% Legal Fee Goods Transport Agency (GTA) 5% Note : In respect of Manpower, Security, Works Contract – Reverse charge is not applicable. The provider himself has to pay Tax If he is un-registered, then CESC has to pay under Reverse charge

Action Plan 1. Bill Booking under Reverse charge – Prepare Monthly statement as soon as the Bills are received. See that GST paid under Reverse charge within 2 months from the Invoice date. For the delayed payment Interest has to pay 2. For the old Bills, If the payment is made to the party after 01st July, then GST has to pay at 18%. If the payment is made before 1st July, then Service Tax at 15%. Accordingly CESC has to pay the Tax 3. URD Purchase (Less than Rs.20L purchase of Goods or Service) – CESC is liable for payment of GST 4. Credit can be total amount of CGST, SGST, IGST against Challan. But utilisation should be under respective head while filing the monthly Return 5. Mention the Tax particulars in the Works Order – Inclusive, Exclusive of GST 6. You cannot pay his portion of Tax under GST. He has to Register under GST and pay Tax 7. Under Works Contract – GST is 18% on total Invoice value.

Action Plan 1. Get the full details from Supplier / Customer for sale of Scrap, Supervision Charges 2. CESC has to prepare proper GST Bill for Sales & Service 3. In the case of Supervision charges, the Contractor may take GST credit hence, full details has to be mentioned in the Invoice 4. Online upload – No manual entry. 5. Even for Sales Return, Purchase Return, entry to be passed in GSTR2 6. For Transformer Repair – Material given free of cost – Issue Delivery Note with E-Waybill for the supply of goods. But repair charges attracts GST 7. Keep Division-wise account, incorporate all Sales & Purchase, Pay TAX and file Monthly Return 8. Educate the vendor (Manpower, Security, Car rental, Works contract services)